Vertu Motors Share Discussion Threads

[mortimer7] 06/1/2020 09:18

SMMT Figures published this morning show the number of new car units registered in the UK in December increased by 3.4% compared to December 2018.
The total number registered in 2019 was 2,311,140 compared to 2,367,147 in 2018.

SMMT Commentary "Despite the overall decline in 2019, the UK car market remains the second biggest in the EU, behind Germany. It is also one of the most diverse, with buyers able to choose from some 350 different models available in various fuel types and body styles to suit all driving needs. With nearly 90 exciting new generation models – 23 of them zero emission cars and 11 plug-in hybrids – set to make their showroom debuts in 2020, and some compelling deals on offer, the industry is committed to new technology that will benefit consumers and the broader environment."

[essentialinvestor] 23/12/2019 14:58

Worth a look if it gets down to 32/33 ?.

[essentialinvestor] 21/12/2019 16:29

Will the FCA clamp down on PCP in 2020 ?.

[mortimer7] 05/12/2019 09:06

SMMT Figures published this morning show the number of new car units registered in the UK in November fell slightly by 1.3% versus November 2018. Total units registered were 156,621 versus 158,639 last November.

[mortimer7] 05/11/2019 11:40

This morning, SMMT published the unit numbers for new cars registered in the UK in October. The total was 143,251 a fall of 6.7% compared to October 2018 when the total was 153,599.

[mortimer7] 30/10/2019 12:23

For information:
The FCA consultation on Motor Finance commission closes on 15/1/2020 & they state a policy announcement will be made in Q2 2020.

[sphere25] 22/10/2019 15:22

Loitering around that 40p mark now. That's a cracking 20% move higher from the buy posted below. More to come or is it time to take some off the table.

Decisions, decisions ;-)

----------------------------------------------------------------------------------
Sphere25
10 Oct '19 - 12:07 - 1557 of 1565 Edit
0 0 0
Thanks for the post DaveBowler. I have nipped in for a few VTU at 33p and put it on the main watchlist.

......


....

[ed 123] 22/10/2019 13:17

Thanks, EI. :-)

(Apologies, going a bit off-topic.)

Directing my investments is problematic these days.

My Vertu holding is part of my positioning on the assumption there will not be 'no deal' Brexit. However, the global slowdown and the very loose monetary conditions add further layers of uncertainty/complexity to the Brexit backdrop.

Are you continuing with your cautious (my judgement!) approach?

[essentialinvestor] 22/10/2019 12:12

...I was so unimpressed I stated selling when I got home..

That made me smile Ed! ).

[ed 123] 21/10/2019 22:49

Hope it goes well for you, f15jcm. :-)

Fwiw, I'm holding some Lookers too, and MMH and CFYN. Yep, won't so much lose a finger if this goes wrong, more a full arm!

FCA are looking at the industry. The impression I have is that Lookers don't think they've done much wrong, administrative failings but not misselling. Of course, I may be wrong in this, so hope I don't mislead anyone.

Pendragon was a special case, made special by Trevor Finn. I had a little disagreement with him at an agm a couple of years back. He did me a favour in that I was so unimpressed I started selling when I got home.

At the end of the day it's all a gamble. I think I'll be ok with my current motor traders but, if it goes badly, I've sized to lose just the one arm. :-O

Good luck again. :-)

[ed 123] 21/10/2019 20:56

You may be right, f15jcm. If you are, then I'm due for some losses.

I could be misguided but I took note of Tony Bramhall's buying of Lookers' shares in quantity. He's been in motor industry management for 50 years and is currently a non-exec at Lookers. He ought to know the risks associated with the FCA investigation at Lookers.

Ok, Vertu is a different company but they run dealerships for some of the same car manufacturers. Financing arrangements are likely to be very similar across the industry.

If the stockmarket has overestimated the risk, then now (or the past month) could be a once in a decade chance for a punter like me to buy cheaply and for management or private equity to get a good takeover deal.

[f15jcm] 21/10/2019 19:31

Interesting indeed. I like the company and it is the pick of the sector for me but the FCA investigation into motor finance makes the whole industry uninvestable at the moment IMO.

[ed 123] 21/10/2019 17:04

Buyer(s) were keen today. Shares went up 9% and finished at the day's high.

Algorithm trading or Brexit relief or corporate activity?

See what tomorrow brings.

[sphere25] 10/10/2019 12:07

Thanks for the post DaveBowler. I have nipped in for a few VTU at 33p and put it on the main watchlist.

VTU looks interesting. I do feel this isn't a million miles away from a long term tuck away and hold. This sector has been absolutely pummelled with bad news, after bad news, after more bad news.

These operating metrics and the asset backing do say a hell of alot IMO:

"2020E P/E of 6.5x falling to 6.0x in 2021E and an EV/EBITDA of 3.1x falling to 2.9x with a dividend yield of c.5% backed up by our average implied intrinsic value per share of 72.4p and net tangible assets per share of 46.1p."

Clearly there could be a further deterioration, but I'd say a significant amount of the doom and gloom is already in the price and VTU comes out a beneficiary of the demise of others - debt is always the killer.

The market tends to look forward about 9 months. There is plenty of doom and gloom out there and many stocks are trading on far too high a multiples considering the profit warnings to follow.

At this lowly valuation and the asset backing though, a warning gets bought up imo. The 9 months further out that the market soon looks at won't justify the lowly rating here either imo.

Let's see how much of a mess the political meddlers make and how much is in the price already.

Interesting one!

[davebowler] 09/10/2019 12:39

Zeus;
Trading in line
Vertu has delivered a robust set of H1 results, demonstrating clear outperformance. We are maintaining our underlying trading assumptions but incorporate the impact of IFRS 16 into forecasts. This has a net £0.4m impact to adj. PBT forecasts but is cash and net debt neutral. While the outlook is no doubt uncertain, we believe the Group is well positioned to cope with market uncertainty given its strong balance sheet, rising FCF generation (FCF yield in 2021E of 9.9% rising to 11.4% in 2022E) and strong track record of delivering disciplined growth.

§ Interim results: Vertu has delivered resilient H1 results demonstrating clear market outperformance against what remains a difficult economic backdrop as well as relentless cost pressures as previously flagged. Revenues were +5.6% YOY, and +2.3% on a LFL basis. Gross profits were +4.1% in absolute terms, with gross margins broadly stable at 10.5% (10.6% in H1 2019). Gross margins in new and used vehicles softened by 30bps and 70bps respectively driven by the tougher trading environment, albeit this was partially offset by a 60bps improvement in gross margin in Fleet and Commercial and 360bps improvement in aftersales (80 bps on a like-for-like basis which excludes the impact of the Ford parts reorganisation).

§ Key performance drivers: The group saw a 10.1% decline in new car units on a LFL basis, albeit with GPPU up to £1,418 from £1,365 last year driven by strong pricing disciplines and hitting OEM targets to earn bonus income. The Group outperformed the market in new fleet cars, growing like-for-like volumes including agency volumes by 13.8% against a decline of 1.3% in the UK fleet market. In used, like-for-like volumes and revenues were up 1.6% and 3.3% respectively despite a softening consumer environment. The Group achieved an 8.5% increase in the Group’s like-for-like service revenues in the Period. The like-for-like gross margin percentage on vehicle servicing rose to 76.9% (H1 2018: 75.8%).

§ Forecasts: We leave our underlying trading assumptions unchanged but incorporate the impact of IFRS 16. This has a net £0.4m negative impact on adj. PBT forecasts but is cash and net debt neutral. We now expect adj. PBT in 2020E of £23.5m going to £25.0m in 2021E. We incorporate the impact of disposals YTD, increased financing costs and lower working capital into our cash flow, resulting in lower net debt number for the full year. In our view, maintaining forecast at this juncture is a signal of the strength of the group’s performance YTD and potential for outperformance compared to the sector in the full year results.

§ Investment view: We believe the long-term valuation remains compelling at a 2020E P/E of 6.5x falling to 6.0x in 2021E and an EV/EBITDA of 3.1x falling to 2.9x with a dividend yield of c.5% backed up by our average implied intrinsic value per share of 72.4p and net tangible assets per share of 46.1p.

[mortimer7] 04/10/2019 09:14

SMMT have issued the new car registration unit numbers for September 2019 this morning, which shows a 1.6% increase compared to September 2018.
Total 343,255 versus 338,834.

September 2018 total was unusually low due to the implementation of WLTP regulations, so whilst up this year, in context the result is not all that good.

[mortimer7] 05/9/2019 09:09

SMMT have issued the new car registration unit numbers for August 2019 this morning, which show a 1.6% drop compared to August 2018. Total units 92,573 versus 94,094 LY.
After February, August is the UK's quietest month for registrations so the numbers in isolation aren't too significant.

[mortimer7] 30/8/2019 10:29

Pre-close trading update should be out Monday or Tuesday (Half year 31/8/19).

[mortimer7] 05/8/2019 09:11

SMMT have issued the new car registration unit numbers for July 2019 this morning, which shows a 4.1% drop compared to July 2018. Total 157,198 versus 163,898.

[mortimer7] 22/7/2019 10:32

New Chairman appointed...

[mortimer7] 04/7/2019 09:16

SMMT have issued the new car registration unit numbers for June 2019 this morning, which shows a 4.9% drop compared to June 2018. Total 223,421 versus 234,945.
Also at half year stage 2019 is down 3.4% versus 2018.
Considering Brexit was due to happen in March, didn't & then the delays, plus WLTP & all the other stuff going on, I don't think this is too bad.

[zoolook] 29/6/2019 14:41

As if there aren’t enough external difficulties in the sector the competition are creating problems of their own

[mortimer7] 27/6/2019 16:26

Lookers ...FCA, ouch!
Pendragon new CEO March, quit today.